Union membership and the arc of inequality (graph)

A fascinating graph by Colin Gordon for Dissent magazine shows the relationship in the United States between union membership and inequality.

A fascinating graph by Colin Gordon for Dissent magazine illustrates the relationship in the United States between union membership and inequality. Essentially, as union membership has declined (the blue line) the share of income going to the top 10 per cent has increased (the red line).

You can play around with the variables using the drop down menus, switching between the top 10 per cent and the top five and one per cents. You can also switch between private and public sector union membership.

Not, I imagine, something we didn’t already suspect, but it’s useful to have it put so clearly.

11 Responses to “Union membership and the arc of inequality (graph)”

  1. Arthur

    The charts do not seem to confirm the thesis proposed. Union membership starts falling from around 1957, yet the share of the top 10% remains flat until 1982. That is a period of 25 years where the correlation does not work! I’d suggest that what the graph shows is two coincidental variables, but not a causal relation. I’d further suggest that the actual causal relation requires a third variable, and that is the relative demand for labour-power.

    Where the relative demand for labour-power declines, wages fall, and as wages fall over a prolonged period, workers are more likely to decide that there is not much point in belonging to a TU. As Engels noted more than 100 years ago,

    ““The
    history of these Unions is a long series of defeats of the
    working-men, interrupted by a few isolated victories. All these
    efforts naturally cannot alter the economic law according to which
    wages are determined by the relation between supply and demand in the
    labour market. Hence the Unions remain powerless against all great
    forces which influence this relation. In a commercial crisis the
    Union itself must reduce wages or dissolve wholly; and in a time of
    considerable increase in the demand for labour, it cannot fix the
    rate of wages higher than would be reached spontaneously by the
    competition of the capitalists among themselves.”

    We’ve seen something similar recently with the Public sector unions in the UK, who are the most powerful, but who have had negotiated not an improvement but a worsening of their members wages and pensions. Where the demand for labour-power falls, wages fall and the share of profits rises, and with the share of capital’s agents.

    So, its not surprising that during the period of the Post War Long Wave Boom, the chart shows that despite falling union membership the share of the top 10% was stable, whilst we know that real wages rose during this period. Similarly, in the Long Wave downturn that began in the 1970’s, but takes real effect on wage share in the early 1980’s, we see the profit share, and the income share of the top 10% rise, as wages fell.

    It usually takes around 10 years after the start of a new long wave boom for the increased demand for labour-power to begin raising wages noticeably. This boom began in 1999. Its most noted effect has been in China, where the demand for labour-power has risen most sharply, and where wages have risen similarly despite the absence of independent TU’s.

    Of course, reformists like to present matters as being that workers condition can rise inexorably to Socialism if only workers are unionised, if only they vote for reformist parties. The facts show otherwise. If wages rise too much, capital accumulation slows down reducing demand for labour-power, thereby putting downward pressure on wages. Unions can only marginally affect relations that are really determined by the laws of supply and demand, that are determined by the needs of Capital.

    Nor can reformist governments change that relation so long as Capital rules. We have had more than 100 years when such Governments could have changed things, but inequality has grown. The reformist parties cannot even now convince workers of that idea, as witnessed by the fact that large numbers of them vote for the Tories!

  2. SadButMadLad

    Interesting that the chart stops at 2009, the start of the recession. A time when union membership would increase as wages get squeezed and workers feel it would be useful to have a union behind them as they try and keep their wages high. In times of a boom, with wages rising naturally, the need for unions is pretty much non-existent.

    As Arthur says, correlation is not causation.

  3. SadButMadLad

    Interesting that the chart stops at 2009, the start of the recession. A time when union membership would increase as wages get squeezed and workers feel it would be useful to have a union behind them as they try and keep their wages high. In times of a boom, with wages rising naturally, the need for unions is pretty much non-existent.

    As Arthur says, correlation is not causation.

  4. SadButMadLad

    Interesting that the chart stops at 2009, the start of the recession. A time when union membership would increase as wages get squeezed and workers feel it would be useful to have a union behind them as they try and keep their wages high. In times of a boom, with wages rising naturally, the need for unions is pretty much non-existent.

    As Arthur says, correlation is not causation.

  5. SadButMadLad

    Interesting that the chart stops at 2009, the start of the recession. A time when union membership would increase as wages get squeezed and workers feel it would be useful to have a union behind them as they try and keep their wages high. In times of a boom, with wages rising naturally, the need for unions is pretty much non-existent.

    As Arthur says, correlation is not causation.

  6. SadButMadLad

    Interesting that the chart stops at 2009, the start of the recession. A time when union membership would increase as wages get squeezed and workers feel it would be useful to have a union behind them as they try and keep their wages high. In times of a boom, with wages rising naturally, the need for unions is pretty much non-existent.

    As Arthur says, correlation is not causation.

  7. SadButMadLad

    Interesting that the chart stops at 2009, the start of the recession. A time when union membership would increase as wages get squeezed and workers feel it would be useful to have a union behind them as they try and keep their wages high. In times of a boom, with wages rising naturally, the need for unions is pretty much non-existent.

    As Arthur says, correlation is not causation.

  8. SadButMadLad

    Interesting that the chart stops at 2009, the start of the recession. A time when union membership would increase as wages get squeezed and workers feel it would be useful to have a union behind them as they try and keep their wages high. In times of a boom, with wages rising naturally, the need for unions is pretty much non-existent.

    As Arthur says, correlation is not causation.

  9. SadButMadLad

    Interesting that the chart stops at 2009, the start of the recession. A time when union membership would increase as wages get squeezed and workers feel it would be useful to have a union behind them as they try and keep their wages high. In times of a boom, with wages rising naturally, the need for unions is pretty much non-existent.

    As Arthur says, correlation is not causation.

  10. salamisausage

    Nonsense. The growth in earnings of the top ten
    percent in the USA plots the development of the internet and WWW as a
    means of generating extraordinary wealth for entrepreneurs. The
    decline in union membership is likely to be affected by the same
    phenomenon; the decline in blue-collar workers as commerce moves more
    on-line.

  11. micklikeariot

    neither correlation nor causation. Again – Left foot forward have nobody who can interpret stats or a graph.

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